Annual General Meeting of RWE AG on 19 April 2012 Dr. Juergen Grossmann Chief Executive Officer
We have been shaping energy transformation since 2008: €23 billion invested » Nine highly efficient » Around €700 million annually for the gas and coal-fired power plants distribution networks in Germany » Europe’s leading investor in » Wide range of products from energy renewables efficiency to electric mobility
Our efforts are rewarded » European School of Technology » Fortune ranks RWE number 3 votes RWE European innovation amongst most renowned global leader in the industry energy utilities 1 1 2 3 3 3 4 5 8 2008 2009 2010 2011
We get things done – 24/7! » 72,000 employees, of which 36,000 are in Germany » Occupational safety: Reduction in accident numbers for 10th year in succession » We continue to train far more people than we need
The topics How did RWE‘s What challenges will What is RWE doing business develop RWE have to to ensure its long- last year? overcome in the next term success? few years? What is the current status on our package of measures? 1 2 3
The topics How did RWE‘s What challenges will What is RWE doing business develop RWE have to to ensure its long- last year? overcome in the next term success? few years? What is the current status on our package of measures? 1 2 3
A difficult year behind us 2011 Compared to 2010 (in € billions) EBITDA 8.5 -18% Operating 5.8 -24% result Recurrent 2.5 -34% net income CAPEX 6.4 +/- 0%
Main reasons for decline in earnings 1 Decoupling of gas and oil prices Deterioration in earnings situation in 2 German electricity generation 3 Exit from nuclear energy in Germany
Legal proceedings on nuclear energy » Legal action against the three-month moratorium on nuclear energy » Review of lawfulness of tax on nuclear fuels » Constitutional complaint against 13th amendment to Atomic Energy Act Judicial decision will make situation clearer for shareholders
Dividend proposal for 2011 (€ per share) » Payout ratio of 50% 4.50 * of recurrent net income 3.50 * » High dividend yield: 3.50 3.50 3.15 7.4% for ordinary shares, 7.9% for preference shares 2.00 1.50 1.75 1.25 2003 2004 2005 2006 2007 2008 2009 2010 2011 * Increased payout ratio
Upward trend for RWE share price since beginning of 2012 Performance of RWE shares (in €) » Implementation of package of measures is seen as positive 60 Ordinary share 50 Preferred share 40 30 20 10 0 30.12.2010 30.12.2011
Package of measures to ensure our future success 1 Capital measures Strengthening of 2 Divestment of parts of business financial power for long-term 3 Efficiency programme growth 4 Streamlining of investment budget
Capital measures almost complete » Equity capital increased by €2.1 billion » Hybrid bonds (mix of equity and third-party capital) placed for around €1.5 billion
Sale of parts of business Divestments reduced by up to €7 billion Activities of RWE Dea Parts of German sales and distribution networks business NET4GAS … Other (Berlinwasser, stakes in fossil-fuelled power plants)
New efficiency programme introduced (in € millions) » We are progressing faster than 250 1,000 planned 750 » Target: leverage earnings potential of €1 billion by 2014 500 250 » Focus on cost reductions and increase in proceeds 500 500 2013 2014 Total
Streamlining of investment budget approved CAPEX in € billions » Investments of €16 billion planned for 2012–2014 6.4 6.4 ~ 6 5.9 ~4 – 5 » 50% earmarked for growth projects 4.5 » Growth areas: RWE Innogy, RWE Dea, Central Eastern and South Eastern Europe 2008 2009 2010 2011 2012 2013 2014 planned
Faster, more flexible, closer » Reduction of duplicate functions implemented » Sales and distribution networks centralised » More responsibility in the regions » Expertise on power plant new build pooled within RWE Technology
The topics How did RWE‘s What challenges will What is RWE doing business develop RWE have to to ensure its long- last year? overcome in the next term success? few years? What is the current status on our package of measures? 1 2 3
Transformation of energy industry is complex What has to be done: What we are doing: » Expansion of renewables » We invest some €1 billion each year in renewables » Investment in grids and storage » We are investing some €700 million in distribution networks » Enhance energy efficiency » We are European leaders in energy efficiency products » Build flexible new power plants » We are modernising 25% of our conventional power plant fleet by 2014 » Citizen participation » We are on the spot
The topics How did RWE‘s What challenges will What is RWE doing business develop RWE have to to ensure its long- last year? overcome in the next term success? few years? What is the current status on our package of measures? 1 2 3
We have the right strategy » RWE is becoming more international, more robust, more sustainable » Guiding principle: to increase corporate value
A more international RWE » Europe remains our core market » Regional growth markets in Central Eastern and South Eastern Europe » Expansion of renewables, also outside core markets » Oil and gas production also in the Caspian region and Northern Africa RWE core markets with established market positioning Growth markets under observation/initial activities Additional markets, in particular for renewables Additional markets for oil and gas production
A more robust RWE » Presence at all value creation stages » Geographical diversification within Europe » Balanced generation portfolio across all technologies » Stable earnings contribution from regulated business Energy Electricity Electricity trading/ and and Raw materials production Power generation gas gas gas midstream networks sales
A more sustainable RWE Lower CO 2 emissions Expansion of renewables Efficient use of energy »20% by 2020 compared to »Expansion of renewables to »Efficiency improvement of base year 2005 at least 20% of power conventional power plants generation capacity by »Energy efficiency with 2020 Specific CO 2 emissions our customers t/MWh 0.90 0.80 0.70 0.60 0.50 2005 2008 2011 2014 2017 2020 Actual Target
RWE remains a reliable partner » We accept the primacy of politics » Our strategy makes an essential contribution to the transformation of the energy landscape » RWE is involved in all future topics » Europe remains our main market
Outlook 2012: EBITDA, operating result and recurrent net income on a par with previous year Dividend policy unchanged: Payout of 50-60% of recurrent net income New team established: Executive Board succession decided Focus on implementation of our package of measures
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